paul krugman

Was General Motors’ Ex-Ceo Rick Wagoner Right?

Thursday, April 23rd, 2009

wagoner

I seriously doubt you’d find anyone willing to shed tears over the sacking of former General Motors CEO Rick Wagoner. His forced retirement pushed out by the Obama administration with its $20 million payout will make his golden years a bit more golden than the tens of thousands of GM employees who were shown the door as a result of Wagoner’s mostly feckless leadership.

But let me say this: Wagoner was right. Absolutely.

Not about wagering the company’s fate on impractical, inefficient SUVs. That was dumb long before gas reached $4 per gallon. Not when he strong-armed unions into give-backs on wages and benefits, and then shuttered their factories anyway. And not when he dragged his feet on electric- and hybrid-powered consumer vehicles. Or on any of the dozens of other bonehead decisions he presided over that hastened the downfall of what was once the cornerstone of the American manufacturing-based economy.

He was right about this: if the government cannot resolve the crisis of spiraling health care costs and its impact on the business of doing business in America, soon there will be no business.

In August 2004, Wagoner reportedly said that regardless of who won the presidential election two months later, fixing health care would have to be a top priority because paying for health benefits for employees, dependents and retirees was putting American carmakers at a severe disadvantage to foreign competitors.Shortly after President George W. Bush’s second inauguration, Wagoner repeated the point in Chicago. GM’s $5.2 billion annual bill for health care, Wagoner said, raised the price tag for a new GM vehicle by $1,500. Asian and European car manufacturers don’t face the same expenses because their governments pick up a huge portion of health care and pension costs, Wagoner explained.

And Wagoner wasn’t alone. Verizon CEO Ivan Seidenberg said in 2004 that health care for his company’s 800,000 employees, retirees and dependents came at a cost of $3 billion. In fact, a range of employers from small businesses to large-scale manufacturers are calling for health care reform.

And you don’t even have to ask about labor unions, do you? Nobel laureate Paul Krugman has been writing about the imminent
crisis
for years.

But despite the near-universal opinion, the problem persists. It is the problem that everyone recognizes but no one will step up to solve.

In my tenure as Communications Director for the United Electrical, Radio and Machine Workers of America (UE), I noticed a distinct pattern in contract negotiations. It was hardly a keen insight on my part—you’d have to be oblivious not to notice.

In every case—EVERY case—the major sticking point was health care. Grievance procedures, seniority, discipline, holidays,vacation, whatever… all of that could be resolved amicably, but inevitably there would be a battle over who would pay for health care and how much.

And once that battle ended, with no winner, the negotiators from both sides would lament that the health care problem is a chokepoint for progress and a flashpoint for labor unrest.

My idea then, and it’s available to anyone who wants it, free of charge, was for the union and management to sign a joint statement acknowledging that the failure of government to enact comprehensive health care reform was contributing to workplace strife, and that the continued health of the business was contingent upon a resolution of that problem that took the bosses’ and the workers’ heads out of the health care noose.

Get enough of those statements together, from unions and employers all over the country, and take them to Congress and say, “Here’s your political cover. Now fix it.”

That, I think, is where the problem lies.

The insurance industry is a behemoth with a lot of political clout, and politicians are in no itching hurry to challenge it. No matter how much sense it would make to tear the whole thing down….

You’ve probably never heard of Tommy Douglas, but he did just that, and in doing so earned probably the highest accolade a Canadian could ask for the people of Canada named him the best person ever in its history (Neil Peart didn’t even crack the top ten). Douglas was the premier of Saskatchewan, a fairly bland place all things considered, and hardly the place where you’d expect the greatest anything to come from (except, of course, the greatest wife, Hi, Honey!). In 1962, he stood toe-to-toe with the insurance industry and doctors, who went on strike for fear of losing their financial privilege, and won. Saskatchewan socialized its health care system, and soon was followed by the rest of Canada.britney spears circus download

It was a tough and bitter fight, dramatized in the CBC biopic Prairie Giant. (A fine film, but good luck finding it. It was considered to defame one of Douglas’s political rivals, and the CBC pulled all copies of it.) Despite the strike, scare tactics, red-baiting and personal attacks, Douglas and his supporters stood their ground, and now all of Canada doesn’t have to fear that a broken leg or a sudden illness will lead them to financial ruin.


While the American medical establishment boasts of its whiz-bang technology and a tummy-tuck in every pot, none of my Canadian in-laws would trade their health care cards and supposed waiting lists for the “convenience” and expense of American-style medicine.

And yet the United States, all can-do attitude and we’re-number-one bravado, can’t find a way to ensure that its people don’t suffer from treatable illnesses or lose their homes as a result of untimely injury because they, or their employer, can’t afford health care.

And when its major industries are drowning in health care-induced red ink, can’t we finally acknowledge as a nation that subjecting health care to the unfettered market is killing our economy?

It’s too late to save Rick Wagoner’s job (if anybody but Mrs. Wagoner cared to) and maybe too late to save GM. But can we please have some American somewhere stand up and channel his or her inner Tommy Douglas and demand that every American get real
health care, not one person excluded?

If that happens, I will personally head up the effort to name him or her the Best American Ever.

Dave Saldana is a journalist, civil rights attorney, media critic and satire aficianado based in Washington, D.C..

Daily News Round Up: Dignity Goes to the Dogs

Monday, October 13th, 2008


http://a123.g.akamai.net/f/123/12465/1d/media.canada.com/5bd68867-954f-4ea6-b165-b4b7a6c4840a/081002chihuahua.jpg?size=hhl
Hard times clearly call for puppies: Proving that the nation would rather watch CGI-animated chihuahuas dressed in ridiculous outfits than bloated actors Russell Crowe and Leonardo DiCaprio, Beverly Hills Chihuahua was once again top dog at the Box Office, pulling in $17 million on its second weekend, beating out the superstar war action flick, Body of Lies, directed by Ridley Scott. This one’s DOA. (Sorry, couldn’t help it.)

The Dow is up… for now: Spurred by an injection of money from global powers, Britain, France, Germany, and other major European countries, the Dow is riding high—up nearly 600 points. Oil prices, after a big drop, are inching up, $3.56 a barrel.

He’s a winner: New York Times columnist, Paul Krugman, perennial thorn in conservatives side, won the Nobel prize in economics for his writing about how small economies effect international trade patterns. The author of a blog called “Conscience of a Liberal” is staunchly against a John McCain presidency. He’s quoted as saying McCain is more frightening now than he was a few weeks ago.

The Taliban is back:
More clashes at the Pakistani/Afghani border between the Taliban and pro-government forces have killed 51 people, making it more urgent than ever to deal with Afghanistan.

North Korea is losing their edge: The country that was once determined by Bush to be in the Axis of Evil, seems to be going soft. The country is lifting a ban on U.N. inspections of the plutioniom plant it used for an atomic test blast. The United States removed the sounctry from its list of states sponsoring terrorism last week, so North Korea responded by resuming the dismantling of the atomic program.

Barack Obama’s on the money: The Democratic presidential candidate put forth a few more economic proposals today, calling for a 90-day moratorium on foreclosures, a two-year tax break for businesses that create jobs, and proposed that people should be able to withdraw up to $10,000 from their retirement accounts without penalty for the next two years.

Big Brown retires: The venerable racing horse, Big Brown, suffered an intractable injury which effectively ended his successful racing career, which included wins at the Kentucky Derby and the Preakness. The injury to his foot, means that the horse will be retired to breeding.